Why every CEO should know this three letter abbreviation: API

Why every CEO should know this three letter abbreviation: API

$14.4 Trillion. Yes. But it’s not only about that. It’s about providing the best products and services to your customers. It’s about taking responsibility towards employees, shareholders and society. It’s about not letting yourself be ruled by the mundane, but cherish your childhood dream of achieving great results, having the foresight to act upon them and inspiring others to do the same.

Ultimately it’s about delivering value.

CEO’s that cherish this goal and want to grow there business, or even survive with their business, have to act upon a key meta-trend that is currently unfolding. It’s called the Internet of Everything. Dubbed by Cisco, the IoE is the next iteration of the Internet that entails the coming together of people, process, data and things. Its estimated value at stake for the next decade: $14.4 trillion.

The number of things that will be connected to the Internet by 2020: 50 billion.

The driving factors behind the coming of age of this overarching trend are among other things the spectacular growth of cloud services; mobile computing; devices or ‘things’ connected to the internet; social media; and the ability to leverage the large sets of data (Big Data) rendered by all of them.

Companies that will harness the staggering $14+ trillion value of IoE will do this either by reducing cost or increasing profits.

In its white paper one the IoE, Cisco distinguishes the following strategies:

The underlying factor that enables these strategies is our ability to drive value from new and novel ways to connect made possible by the IoE. This is where the Application Program Interface (API) comes into play. API’s are the digital glue that enable the IoE to come about.

An API program removes organizational, functional, and technical barriers to accessing a company’s network and information assets.

The usual suspects that have build entire ecosystems around their business thanks to their API strategy are Google, Apple, Facebook, Twitter, Salesforce and Amazon. As a result they enabled plethoras of people and devices to connect with them. And as a result they are champions in many markets.

The success of a Netflix that started out in 1997 as an online subscription based DVD rental business is exemplary. The case of Netflix is also interesting because it started out in an industry that would change dramatically, clearing many incumbents away. Netflix, not only survived, it triumphed. Netflix is now the world’s leading Internet television network with more than 33 million members in 40 countries enjoying more than one billion hours of TV shows and movies per month. Critical to Netflix success is its API strategy. Through its API it has dramatically increased the rate at which new implementations of its services can be built and delivered to new devices. Currently it streams content to more than 800 different devices. The result is a dramatic rise in customers. In 2011, it became in effect the largest single source of traffic on the Internet in the United States.

In its 2013 Technology Vision Report Accenture indicates that software is integral to how we currently run and reimagine our businesses. It is elemental to how we redesign and produce things, how we create and manage new commercial transactions, how we begin to collaborate at unprecedented levels internally and with customers and suppliers. All the areas in which CEO’s have to have the vision and responsibility to take the lead and set goals. In this new world where software connects everything to everything, CEO’s better start to know the word API if they want to keep delivering value.